- Customer Prospecting and Recruitment
- Credit Analysis
- Credit Administration
- Loan Management and Workout
- Client Maintenance and Retention
We advocate schemes in which the senior credit and relationship managers work closely with the junior ones (the way the master craftsman partners with his apprentice until he demonstrates competence) before they could be entrusted with credit packaging and administration. There is a causal relationship between inexperience and the bad loan portfolio of a financial institution.
Every credit and relationship management officer must demonstrate basic competence in the structure of the Nigerian economy and in essential macro-economic, micro-economic, financial statement and funding structure analyses. In the typical credit analysis training, the young officer is taken through two to four life credit appraisals, with deep insight on incomplete records, poor market definition, bullish financial projection, inadequate capacity or previous preparation (in terms of education, experience and skill, relative to the proposed transaction) and poor organization and governance practices, e. t. c., of the applicant, that might be inimical to sustained prosperity and loan repayment.
Special attention is paid to largely unstructured micro, small, family-scale and sole-proprietor businesses.
In the loan management module, emphasis is on the prevention of bad loans, starting from loan initiation, analysis and approvals right up to documentation and monitoring, to minimize the incidence of non-performance and workout challenges.
Case studies (with special reference to the institution’s historical bad loan portfolio, where desired) are used to demonstrate pitfalls bordering on unethical conduct, inexhaustive appraisal, unbridled profit motive, speculation, incomplete documentation, hasty disbursement, monetary and fiscal policy changes and the sense of anticipation and forecasting, e. t. c.
